Use the following information from Marvel Company for the month of July to answer questions 1 through 4.
1. Perpetual: Assume that Marvel uses a perpetual FIFO inventory system. What is the dollar value of its ending inventory?
- $2,940
- $2,685
- $2,625
- $2,852
- $2,705
Perpetual Inventory System:
The perpetual inventory system is that system of accounting the inventory in which the inventory is verified physically. This is done so that the lost and misplaced items are also recorded. The entries are made through merchandise accounts.
The dollar value of the ending inventory using FIFO.
Explanation of Solution
Option a, $2,940 is correct.
Given,
The company uses perpetual FIFO inventory system.
Calculation of the value of ending inventory:
Date | Goods purchased | Cost of goods sold | Inventory balance |
July 1 | |||
July 3 | 348 units | ||
July 8 | |||
July 15 | 257 units | ||
July 23 | |||
$15,527 | $2,940 |
The value of the ending inventory is $2,940.
Thus, option a is correct.
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